www.iva.co.uk

Due to the drop in house prices in the 2 years since starting my iva and the change in the way lenders will make large loans without proof of income(rightly), I find my ability to conclude my agreement in 3 years time utterly impossible, what are my options?

It's likely that you will need to pay an additional year into your IVA if you can't release any equity.

Unless an extra 12 months has been written into your IVA, then your IP will probably hold another creditors meeting, and it is likely that you will have to continue for another 12 months.

What does your proposal say on this point?

My proposal states that in the 4th year of the iva a valuation and 2 mortgage offers must be obtained, although equity has dropped there is still i think enough worth persuing, bearing in mind they insisted on 75p dividend. I am sure that i will not receive any mortgage offers,due to the large mortgage i already have. I think my creditors will bankrupt me and all the difficulty will have been for nothing!

Hi,

It is very unlikely that they will Bankrupt you, they will simply add a further year on to the term so it ends on year 6.

I don't think they will make you bankrupt either. It will cost them too much money for a start off, and it is in no ones best interests.

I think they will just add extra time on. As Melanie says, check your proposal and see what that says.

I agree that it is unlikely that creditors will bankrupt you for something beyond your control. However, three years is a long time away and the mortgage market may have recovered or property prices may have dropped further. You really do not want this to be worrying you for the next three years so it might be worth speaking to your IP for some confirmation of what will happen.

It is more likely that your IP will seek to vary the IVA rather than make you bankrupt. Bankruptcy generally delivers a lose/lose result for creditors and debtor.

Thanks for all of the prompt helpful replies,I asked Grant Thornton for their view but they were vague,when pressed, they said it was possible but unlikely that they would bankrupt us because of the high costs for a dual action.
In a confusing turn of events my brother in law has kindly offered to loan us £25000,provided this was a full and final payment, is this worth proposing to my IP , it would be less than my original unrealistic agreement but more i think than would be realised in bankruptcy. If yes how would i go about this?

If you are already 2 years into an IVA and you have a 4th year equity release clause I would have thought that the 4th year falls between months 37 and 48 and not in 3 years time.
I'm in a similar position my IVA started in March 2007 and my understanding is that year 4 for me begins in April 2010, I stand to be corrected by the experts but that's the way I have always understood the situation.
I don't expect to be able to raise any equity either and all this talk about possible bankruptcy is really worrying, I would have thought if you have met all your IVA payments the fact that the housing market has crashed should not be classed as grounds for bankruptcy, until I read these posts the thought had never crossed my mind.
I'm going to contact my IP for clarification of this point [xx(][xx(]

kevin.me wrote:

My proposal states that in the 4th year of the iva a valuation and 2 mortgage offers must be obtained, although equity has dropped there is still i think enough worth persuing, bearing in mind they insisted on 75p dividend. I am sure that i will not receive any mortgage offers,due to the large mortgage i already have. I think my creditors will bankrupt me and all the difficulty will have been for nothing!

We have to try for a remortgage in month 54.

I would not worry about bankruptcy northumbrian, it is not likely to happen.

You may well find that your creditors request that you pay for a further 12 months.

Kevin - that offer may well be a good one - difficult to tell without knowing more about your IVA, but GT are a first class firm and ought to be able to tell you whether they think it has mileage or not.

Hi all,
thanks to everyone for the helpfull replies, does anyone know of the likely costs in a bankruptcy (both my wife would be included as its a joint iva) This is to try to guage the remaining equity,and how attractive a final settlement payment would be. Also i was told that a forced sale scenario is normally calculated at 85% of property value is this true or just wishfull thinking?

Apologies for the spelling (gauge?)